Chicago Mayor Rahm Emanuel and Illinois Attorney General Lisa Madigan announced the creation of a $26 million program Tuesday that will focus on redeveloping vacant properties.
The funds come from 11 private lending groups and the money will, in turn, be available to those seeking loans to redevelop or rehab groups of one- to four-unit buildings for "affordable rental housing."
“This new loan pool targets the redevelopment of one- to four-unit buildings, which represent nearly 50 percent of all rental units in Chicago and are too often under-resourced,” Emanuel said. “Through strong collaboration between the City, businesses, and non-profits, like CIC, this financing will help small and mid-sized developers make a strong investment in our communities, while most importantly providing affordable housing options for Chicagoans.”
The Small Apartment Building Rental Redevelopment Program, as the effort is being called, will offer 10-year loans for redevelopment projects with a minimum of nine housing units. The program will be administered by the Community Investment Corporation, which is "a not-for-profit rehab lender specializing in multifamily apartment buildings." The program is a line-item on the city’s “Five-Year Housing Plan,” which was approved by the Chicago City Council in February. (Read more about concerns surrounding the Five-Year Housing Plan here.)
The MacArthur Foundation is slated to donate $5 million to the program, while Madigan's office put $2 million towards the effort, using funds that came from the national foreclosure settlement.
“This funding is a down payment on the future for communities hit hardest by the foreclosure crisis,” said Madigan. “Investing in affordable housing will help stabilize these neighborhoods and help families move forward on the road to recovery.”
It is estimated that the program will fund the redevelopment of about 200 properties with 400 units. The buildings will be mostly in low and moderate income communities, "where foreclosure rates are often more than twice the citywide average," according to an announcement from the mayor's office.